Regulations on the minimum age at which workers may draw pensions are a major determinant of retirement behaviour, and discussion in many countries has recently turned towards raising minimum retirement ages and unifying those of men and women. While spouses' retirement decisions are clearly often interdependent on account of similar tastes, joint assets, rules for sharing income and housework and/or complementarity of leisure, data limitations have largely precluded empirical research on this topic. In Discussion Paper No. 855, Josef Zweimüller, Research Affiliate Rudolf Winter-Ebmer and Josef Falkinger fill this gap and provide policy simulation results for Austria. They characterize families by the economic relationships between the partners and develop a model to investigate the effects of raising minimum retirement ages on actual retirement behaviour as families trade off income and leisure.

When partners share incomes and housework, both are likely to postpone withdrawal from the labour force if the wife's minimum retirement age increases, but this is unlikely to affect husbands' retirement behaviour if each partner spends her/his own income. In `patriarchal' households, in which the husband contributes the bulk of income while the wife does the housework, the husband will react by delaying his own retirement (but the wife will probably retire earlier if his minimum retirement age increases).

They then apply their model to data from Austria's 1983 micro census, which describe the labour force status, individual and family characteristics for 1% of the population. Their results indicate that a woman's eligibility to draw a pension will raise the probability of her husband's retirement, but husbands' eligibility has no significant impact on their wives' retirement behaviour, which suggests that `patriarchal' households dominate among the older generation. They then simulate the effect of raising women's minimum retirement age by five years to show that the retirement probabilities of women in the affected age group will fall by about 6%, while those of men will fall by about half that amount.

Retirement of Spouses and Social Security Reform
Josef Zweimüller, Rudolf Winter-Ebmer and Josef Falkinger

Discussion Paper No. 855, January 1994 (HR)